A Firm Issues Six-Month Commercial Paper with $500,000 Face Value

question 62

Multiple Choice

A firm issues six-month commercial paper with $500,000 face value and receives $488,000. What is the EAR the firm is paying for these funds?

• A) 2.40%
• B) 2.45%
• C) 4.98%
• D) 6.00%

---

Definitions:

Panic Attacks

Intense, short bursts of intense fear and anxiety.

Agoraphobia

An anxiety disorder characterized by an intense fear of being in places where escape might be difficult or help unavailable, often leading to avoidance of public places.

Panic Disorder

A mood disorder involving panic attacks (intense, short bursts of intense fear and anxiety).

Generalized Anxiety Disorder

A disorder characterized by high levels of anxiety over a period of 6 months or more.